The Federal Reserve cut its benchmark interest rate for the third time this year, shaving off another quarter of a percentage point to a range of between 1.5% and 1.75%. Arguments have raged at the central bank about the need for further easing in America’s still robust economy. Many have read the runes of the carefully worded statement by Jerome Powell, the Fed’s chairman, that “policy is likely to remain appropriate”, to suggest that future reductions are on hold.
Official figures showed that the American economy grew by 1.9% at an annualised rate in the third quarter. The data underlined the Fed ratesetters’ conundrum; consumer and government spending remained buoyant, though business investment was limp.
Groupe PSA, the maker of the Peugeot car brand, and Fiat Chrysler Automobiles agreed to merge, creating the world’s fourth-largest car manufacturer. Carmakers are under increasing pressure to consolidate in an industry beset by rising costs and disruptive technologies. Earlier this year Fiat Chrysler tried to engineer a merger with Renault, but it hit a dead end when the French government, which owns 15% of Renault, withheld its support.
The recent strike at General Motors is now thought to have cost the company $2.9bn. The 40-day strike was the longest at the carmaker since 1970.
In a week when it announced that it would have to lay off up to 15% of its workforce, Juul which dominates the market for e-cigarettes, faced a lawsuit from a former executive accusing it of selling contaminated vaping pods to retailers. It is another blow for e-cigarettes, which are under scrutiny in dozens of cases of lung disease.
General Electric reported another huge quarterly net loss, this time of $9.5bn, as it booked charges connected to its restructuring. Some $8.7bn of that relates to writing down its investment in Baker Hughes, an oil-services firm.
The long-awaited IPO of Saudi Aramco was reportedly ready to be launched on November 3rd. Shares in the world’s biggest oil company, owned by the Saudi state, are expected to start trading in mid-December.